When Dennis Spencer got his health insurance renewal notice from Blue Cross of Idaho this fall, it contained a caveat: To get Blue Cross insurance next year, he’ll have to participate in the Kootenai Care Network.
For policyholders, that means having surgeries at Kootenai Health’s hospital in Coeur d’Alene and seeing doctors on the list of 450 health care providers who are in the network, all of whom are in Kootenai County.
“I don’t like it,” said 52-year-old real estate agent. “Not happy at all.”
Spencer sees an eye specialist in Spokane and his primary care physician isn’t part of the network. In the event of a surgery, he also wants to be able to pick the hospital or surgery center.
Northwest Specialty Hospital in Post Falls, which touts lower surgery costs than Kootenai Health, isn’t in-network. Neither are Spokane hospitals.
Under the new policy, getting care from out-of-network providers would raise Spencer’s annual deductible from $450 to $50,000, a punitive cost he said he couldn’t afford.
“They say they’re giving you a choice, but it’s not really a choice,” said Spencer, who has to decide whether he’ll renew his plan by Dec. 15.
More than 7,000 Blue Cross members in Kootenai County have received similar letters. The switch to the network model applies to Blue Cross members who buy Affordable Care Act policies through the state’s health marketplace exchange. Many members with individual policies also received the letters.
Blue Cross of Idaho is one of the largest insurance providers in Kootenai County, with about 32,000 members. Commercial plans offered by employers are not affected, but they might be considered for inclusion in the network in the future, said Peter Sorensen, Blue Cross’ director of consumer business.
Network result of high patient costs
Blue Cross adopted the network model because of the high cost of treating patients newly insured through the Affordable Care Act, also known as Obamacare, Sorensen said.
As a group, those patients tend to be sicker than the general population, he said. They have more chronic diseases; they’re less likely to see a primary care provider; and they have high rates of emergency room use. They also cycle through the system, seeing different doctors and duplicating costly services, such as lab work and imaging, he said.
Other insurance companies dropped ACA plans after losing millions of dollars, Sorensen said. Blue Cross of Idaho remains committed to providing insurance options, but needed cost-control strategies, he said.
Blue Cross hopes to reduce patient costs through the network model. About 500 similar networks exist nationwide. They’re physician-led organizations, often sponsored by a hospital.
The network model requires patients to choose a primary care provider, such as a doctor or nurse practitioner. The provider makes referrals when the patient needs to see a specialist. The doctors’ offices share patients’ medical records and track the overall health of the patient population, with the goal of increasing preventive care, Sorensen said. That can include things like reminding 50-year-old patients to schedule their colonoscopies. Or making sure pre-diabetic patients know how to reduce their risk for the disease.
To encourage patients to stay in-network, Blue Cross raised annual deductibles and out-of-pocket maximums for out-of-network services, Sorensen said. In one ACA plan, the annual deductible for out-of-network costs is increasing from $4,000 this year to $50,000 next year for an individual.
However, people who get sick or injured when they’re traveling can visit emergency rooms or urgent care without paying out-of-network costs, he said. And patients with rare health issues not covered by in-network specialists won’t incur those costs either, said Dr. David Chambers, a family physician and Kootenai Care Network’s board chairman. They’ll be referred to out-of-network providers, he said.
Kootenai Care Network formed early this year, said Patt Richesin, the network’s president. It’s a separate entity from Kootenai Health, which operates a 292-bed community hospital and affiliated clinics and services.
That’s a point of confusion, she said. About 40 percent of Kootenai Care Network’s in-network providers are directly employed by Kootenai Health. The other 60 percent are independent.
Even if Obamacare is repealed after President-elect Donald Trump takes office, as Republicans have vowed to do, the network model will persist, Richesin said. It’s part of a broader, cost-control trend in health care that reimburses providers based on patient outcomes, she said.
Though Kootenai Care Network is only working with Blue Cross of Idaho at this time, Richesin said she’s had some initial conversations with other insurance carriers about 2018.
Other providers say they’re getting shut out
Out-of-network providers are concerned about losing business from Blue Cross patients, and view the network as a potential power grab by Kootenai Health.
Kootenai Health has expanded rapidly in recent years, acquiring clinics and adding new hospital facilities. Over a five-year period that ends next year, Kootenai Health will have spent $190 million on capital projects. The construction includes expanding Kootenai Health’s Coeur d’Alene campus and a new Post Falls clinic. An emergency department/operating room remodel will increase Kootenai Health’s operating rooms from eight to 11. The new facilities are serving a growing number of patients, officials say.
Northwest Specialty Hospital in Post Falls asked to join the Kootenai Health Network and was turned down, said Rick Rasmussen, chief executive officer.
“We have no ill will toward Kootenai Health. … But does it really make sense to go with a monopoly?” Rasmussen said.
Northwest Specialty Hospital sees about 60,000 patients each year, and about one-third of the patients have some type of Blue Cross coverage. If the network expands to other Blue Cross insurance plans, being shut out of the network would mean substantial revenue losses, Rasmussen said.
Northwest Specialty Hospital has six operating rooms. It charges about 40 percent less than Kootenai Health for hip and knee replacements and has lower patient infection rates, Rasmussen said.
“If you’re forcing someone to go to the highest-cost provider, I don’t see how that helps control costs,” he said.
Pleasant View Surgery Center has similar concerns, said Dr. Jeff Lyman, a surgeon who is part-owner of the outpatient surgery center in Post Falls.
“If you can’t choose where you’re going to get care, they can treat you however they want,” Lyman said.
The outpatient surgery center opened in 2013, filling a community need at that time for additional operating rooms, said Scott Berger, the center’s administrator.
Kootenai Health Network will consider adding other hospitals and other providers in the future, said Richesin, the president. But that’s too difficult to do during the network’s start-up phase, she said.
Setting up physician-led committees, creating record-sharing systems and starting to track patients’ health on a population level is time-consuming, Richesin said. The network includes a new analytic system that will track patient care and health outcomes, she said.
Comparing the cost of isolated procedures between hospitals isn’t really a fair comparison, Richesin and Chambers added. Kootenai Health sees a larger population, including sicker patients, than Northwest Specialty Hospital and the Pleasant View Surgery Center, Chambers said.
Spencer, the real estate agent, is weighing his health insurance options for next year.
He’s looking into plans from other insurance companies. He’s also considering switching to a low-cost plan that provides only catastrophic health insurance, or paying a penalty for not buying health insurance in 2017.
Spencer said he wants more choices than the network provides.
“I don’t want to go to a group of doctors they choose for me,” Spencer said. “I want to go where I think I can get the best care.”
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